Cryptocurrency Profit rate of tax

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For the financial year 2021-22, cryptocurrency transactions are generally treated as capital gains for tax purposes. New Section 115BBH, effective from April 1, 2022, classifies cryptocurrencies as Virtual Digital Assets, taxed at a flat 30% on total gains without deductions. For transactions before this date, taxation depends on whether crypto was held as a business asset (taxed at slab rates) or a capital asset (20% tax for holdings over 36 months, slab rates for shorter periods).

D.SRINIVASULU REDDY

D.SRINIVASULU REDDY (Querist)
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31 July 2022 cryptocurrency for the F Y-2021-22 In Income Tax Returns Under Which Head have to Shown and How much % Tax Rate Applicable of this . for the F Y-2021-22. can i Shown Under Short Term and Long term as a Equity. Please give the of your Valuable Suggestion about this Sir

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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01 August 2022 Though the taxability of cryptocurrency was not clear till MARCH 2022, but as per new section inserted in the bill, Sec. 115BBH.... the cryptocurrencies are classified as a capital asset for the purpose of taxation and hence, income under the head capital gain will arise on transaction of the same. Based on same line you can declare it under capital gain.

Adv. Ravish Bhatt, ADIT, CIOT

Adv. Ravish Bhatt, ADIT, CIOT (Expert)
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01 August 2022 s.115BBH dealing with tax from transfer of Virtual Digital Assets(which include all known cryptos) came to be introduced in budget 2022. Provisions apply from 01.04.2022 and will result in taxation at the rate of 30% of total gains resulting from transfer of VDA without any deductions.

For any transfer of cryptocurrency made prior to advent of s.115BBH, taxation will be governed per provisions of income tax act absent s.115BBH. Taxation would depend on whether the Cryptocurrency was treated by the holder as business asset or a Capital Asset. In case of treatment thereof as business asset, taxpayer will be taxed at applicable slab rate and in case of treatment thereof as Capital asset, for such currency held for more than 36 months tax will apply at the rate of 20% in terms of s.112 of the Income Tax Act, 1961. For a cryptocurrency treated as capital asset and held for less than 36 months, transfer thereof will entail tax at slab rate for assessee.

You can read more at: https://www.caclubindia.com/articles/cryptocurrencies-and-taxation-thereof-under-indian-income-tax-act-1961-47526.asp

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